Illinois loses 10,000 manufacturing jobs in past year

The preliminary data released by the
Illinois Department of Employment Security (IDES) shows the first small gain
since June, although the overall manufacturing-jobs data shows a net loss of
10,000 jobs in the past year.

Of the 812 layoffs in October, 429 were in manufacturing, and 400 of those jobs were in the city of Belvidere in Boone County. Three
firms permanently closed: Android Belvidere II, Ventra Belvidere LLC and
Eberspaecher.

“High costs and competition from surrounding states continue
to drain manufacturing jobs from Illinois,” Illinois Department of Commerce and Economic Opportunity acting Director Sean McCarthy said in a statement. “We saw several manufacturers move across the border to Wisconsin in
October. Sixteen-hundred new manufacturing jobs is a start, but it is
a drop in the bucket compared to the 10,000 manufacturing jobs Illinois has
lost over the last 12 months – an average loss of nearly 200 jobs per
week.”

Illinois has struggled to recover since the 2007-09 Great
Recession. Manufacturing was particularly hard hit by the recession, and while
neighboring states have recovered from most of its effects, Illinois' recovery
has been slow.

"The recovery has been uneven among the various sectors,
as Illinois still lags in manufacturing, construction and financial activities,
as well as trade, transportation and utilities," Illinois Department of
Employment Security (IDES) Director Jeff Mays said.

Among the factors affecting Illinois' recovery are high
workers' compensation insurance costs. Manufacturing has higher insurance costs
than other industries. While this affects manufacturing in general, Illinois
workers' compensation rates are double or triple those of businesses in
surrounding states.

In Illinois, if the workplace contributes to an injury in
any way, even if it is determined to be 1 percent at fault, the insurance pays
full benefits to the employee. Gov. Bruce Rauner and Republican lawmakers
are seeking reforms in workers' compensation to help lower costs and make the state
more business-friendly. They support a stricter standard requiring that the
workplace be determined the main cause of the injury for an employee
to collect full workers' compensation benefits. Reforms face continued
opposition from long-time legislators, such as Illinois House Speaker Mike
Madigan (D-Chicago) and his colleagues.

Technology also has been a factor
in the loss of manufacturing jobs. New businesses and existing businesses that
are upgrading their manufacturing facilities use new automated technologies
that require fewer workers. The manufacturers' output increases, but fewer jobs
are available to blue-collar workers.

The loss of research and
development (R&D) tax credits in 2015 also affected manufacturing. Between
2010 and 2014, manufacturing earned 60 percent of the R&D tax credits in
the state. R&D tax credits draw investment into manufacturing and other
industries. New and improved products that add to the global market and bring
funds back into the state are a direct result of investing in R&D.

High property taxes, restrictive
and expensive business regulations and the ongoing state budget crisis are also
cited by Republican legislators and conservative think tanks, such as the
Illinois Policy Institute, as factors in Illinois' slow recovery and continued
exodus of jobs and skilled workers.

Manufacturing is not the only
industry affected by the high cost of doing business in Illinois. The construction,
financial, transportation and utilities industries also have seen job
losses over the past year.

Professional and business services,
however, saw a surge in new jobs. The industry added 31,400 jobs between October
2015 and October 2016. Education and health services, leisure and hospitality,
and government also saw increases in jobs.